A purchasing consortium led by Macquarie and KKR has pulled out of a deal to buy electricity distributor UK Power Networks.

Current owner Hong Kong company CK Infrastructure Holdings raised its asking price by an unknown amount two days before the signing of an original deal, the Financial Times reported. The price rise came in response to inflation in the UK, which recently rose to 9.1%. As an infrastructure operator, UK Power Networks receives its income from a share of consumer bills based on price indices linked to inflation. As a result, the company will receive more income as inflation increases.

The six-member purchasing consortium had planned to purchase UK Power Networks for approximately £15bn ($18.2bn). CK Infrastructure Holdings bought the company for £5.5bn ($6.7bn) in 2010. UK Power Networks operates distribution networks across the south-east of Great Britain and is responsible for the largest single share of the UK’s grid.

Macquarie’s bid attracted criticism from lawmakers, who cited the company’s previous experience with UK water utilities. Macquarie owned the Thames Water utility between 2006 and 2017, amassing £2bn ($2.4bn) of debt during its ownership. A BBC investigation found that the funds created by this debt went to Macquarie, contravening the conditions of operation the company agreed.

Responding to this, a Macquarie spokesperson said: “The consequences of a company failing to meet its commitments to the regulator are serious. Over the life of our investment, we reduced the risks and the cost of financing, while maintaining a strong investment grade credit rating.”

During Macquarie’s period of ownership, Thames Water also faced criticism for dumping untreated sewage into rivers. While dumping sewage is legal in the UK, the volume of dumping broke environmental laws, attracting a £20m ($24.3m) fine. In issuing the fine, judge Francis Sheridan said that the dumping came as a result of “inadequate investment, diabolical maintenance, and poor management”.

In 2021, Macquarie purchased a majority stake in Southern Water and earlier in 2022, the company led a consortium to take a controlling stake in energy network company National Grid’s gas infrastructure business.